HORNBACH (HBH) Q1 2026 Earnings - Full Coverage

Thank you very much. Good morning and a warm welcome from my side. Thank you for joining. We delivered a good performance in the first quarter of our current financial year. This is in line with what we already mentioned during our update on current trading at the investor and analyst conference on May 21st, 25. Our net sales grew by 5.7% driven by favorable weather conditions during spring resulting in increased customer footfall. Additionally, sales benefited from two new recent store openings in Neustadt and Straubing, both in Germany. On a like-for-like basis, sales grew by 4.7%. These results are in line with our expectations as we already commented in our analyst and investor conference in May and underline our continued confidence in our robust and resilient business model and our relevance to our customers.

Our gross profit increased alongside the already mentioned sales growth by 5.3%. This resulted in a gross margin of 35.2%, slightly below the prior year period. Adjusted EBIT significantly improved compared to the same period last year. This was mainly driven by improved sales and gross profit improving our cost to sales ratios.

Whilst we are very pleased with our results for Q1, we remain cautious with our guidance for the rest of the year. No changes here as macroeconomic uncertainties and a dampened consumer sentiment could still impact our business. Therefore, we confirm our full-year guidance as announced in May. We continue to expect sales at or slightly above the previous year's level and adjusted EBIT at the previous year's level.

Let us now have a closer look at some of the Q1 results. As mentioned, group net sales in Q1 were up by 5.7% mainly driven by Hornbach Balmark's strong performance. Compared to last year's quarter, we saw increased demand for gardening products and construction materials following the good weather in March, April, and May. Customer frequency in Q1 developed positively with an increase of 4.2% while average tickets also showed a slight upwards trend of 1.1%. It is still too early to conclude that this is a lasting trend towards larger projects but it is a step into the right direction.

The geographic split did not change significantly with slightly more than half of Hornbach Balmark sales now coming from the eight European countries outside Germany. The Hornbach subgroup which mainly caters to professional customers in the construction industry also reported a sales growth of 3.1%. We anticipate that the construction industry in Germany has now bottomed out and that things should slowly start to improve again. The most recent figures show a slight upward trend in order intake and building permits.

Now let's turn to like-for-like sales growth. Generally demand in most European countries benefited from warm and mostly dry spring weather. For the group like-for-like growth was as mentioned 4.7% in total. Germany contributed a growth of 3.4%, other Europe 5.9%. Especially in Luxembourg and the Netherlands, we saw strong like-for-like growth of nearly 11% each. Sales performance was partly driven on average 1.2 additional business days in the euro countries compared to the prior year period. I would also like to point out that sales growth in Q1 has not been influenced by inflationary effects. Consequently, we have seen fewer volume growth as selling prices slightly decreased compared to the prior year period. Let's now have a look at our market share development. We continue to focus on expanding our market share and expanding our strong market position throughout Europe. In all countries for which GfK market share data is available, we managed to increase our footprint in the period from January to April 2025. In Germany, our largest market and despite a highly competitive environment, our share has reached 15.6%, a plus of 0.6 percentage points. In Czechia, we make 38.6% of the market, 1.5% more than in the prior year period. And in the Netherlands, we gained 1.4 percentage points, now making 29.7% of the total market. In Austria and Switzerland, we also saw a positive development. This illustrates that our offering remains highly relevant to our do-it-yourself customers and that we were able to benefit from the favorable weather conditions during this spring season. Let me also remind you that compared to the pre-COVID period, this is a tremendous development and strong achievement of our colleagues catering for our customers. Not only did we manage to grow in the time of the pandemic, we also defended market shares and improved them even further.

Let's now jump to e-commerce development. Customer engagement across our interconnected platforms remains high, confirming that these are well-established sales channels, both in our do-it-yourself and do-it-for-me offerings. E-commerce sales of Hornbach Balmark showed a strong growth of 11.1% resulting in an increased e-commerce share of 13.1% in Q1. Both direct delivery and click and collect developed positively with approximately 12% and 8% growth respectively.

And with that, I would like to take a closer look at the cost and expense development in our P&L. Our gross profit increased by 5.3 percentage points, mostly in line with the growth in net sales. Gross margin came in at 35.2% after 35.4% in the prior year period. This reflects as already mentioned a normalization of selling prices in the DIY sector. Let us now look at our selling and store expenses. While we are now seeing the full effect of increased wages in all countries we operate in, costs have risen slower than sales. This leads us to the disproportionately positive development of adjusted EBIT. Overall, we improved our adjusted EBIT by 10.4% compared to Q1 last year based on a successful spring season combined with improved cost to sales ratios. With this overall adjusted EBIT margin came in at a comfortable 8.5%, an increase of 0.4 percentage points compared to the prior year period. There were no significant non-operating items or adjustments in Q1.

Let's now turn to the cash flow statement. Our cash inflow from operating activities increased significantly compared to the previous year primarily driven by cash inflow from change in working capital. This is due to among other things lower utilization of the reverse factoring program which was fully repaid in the first quarter as usual and to a reduction of inventories. Funds from operations increased slightly, mainly driven by the higher net income for the period. CapEx summed up to 48 million euros in Q1 compared to 23 million in the same period last year. As planned, 58% was spent on land and real estate, mainly for new stores, while the rest was attributed to store conversions and equipment as well as software. Free cash flow improved to 47 million euros reflecting the already mentioned change in working capital. Let us now have a look at our balance sheet. As of May 31st, 2025, Hornbach once again delivered a robust balance sheet. Compared to February 28th, 2025, the consolidated balance sheet slightly increased to 4.7 billion euros. The equity ratio was slightly up, coming in at 45.5%, remaining on a strong level. All in all, our balance sheet underpins our robust financial position as well as the resilience of our business model.

Before we open the floor to questions, I want to highlight our continued focus on strategic priorities, cost management, and sustainable growth through targeted investments and operational efficiency. With our strong private labels, everyday low price strategy, and commitment to sustainability, we aim to support customers, maintain market leadership, and deliver value to shareholders. In summary, we are well positioned to navigate the complex macroeconomic and geopolitical environment and capture medium and long-term growth opportunities in the home improvement sector. That makes us very confident about a successful development in the future. Our current guidance for the 25/26 financial year reflects ongoing macroeconomic uncertainties and subdued consumer sentiment. Therefore, we are currently confirming our original forecast published in May. We continue to expect net sales at or slightly above the level of 24/25 and adjusted EBIT at the level of 24/25. However, given the good earnings performance in the first quarter of 25/26, adjusted EBIT in the upper half of the guidance range is currently likely. And with that I conclude my presentation and hand back to Anie Kalbat for Q&A session.

Okay, thank you for the questions. Shall I answer now? First question concerned online sales. I would guess, you know, we had a very strong peak of online sales during the COVID pandemic and after that we got on the path of normalization which meant decreased online sales and I think we have now reached the bottom and are on a normal increasing way of our online sales. In addition, it's worth to mention that since some time we also reported about that we are operating our marketplace which might influence our online sales in a positive way because our product range gets broader for the customers and makes our web shop even more interesting. Guidance cost increases. Cost increases are mostly employee wages but we have not awaiting a very big increase. Now we have the higher wages which began at the end of the last year and it takes some months until the basis is reached. And trading. We are now reporting Q1. We said Q1 we have had a positive trading. This trend is still ongoing and our trading is very sufficient in the moment. Okay, Fulkar, does this answer your questions?

Thank you for these questions. I think the 3.7% which you mentioned is a wage increase which we have in the months of now I think we had it since we have to wait until September until we reach that basis. And that's the main driver for increases, not other things. And concerning Hornbach, I mentioned we had a turnover increase of 3.1% in this quarter and we have the feeling that also in Hornbach we have reached the depth of the valley and that this industry is slowly recovering. But the main effects we are awaiting for next year only.

Okay, we are at a level in Q1 of 15.6% market share in Germany now and of course we have no special targets in market share. We tend to deliver our customers with the best we can do and market share is an outcome of our normal operating. Yes. But of course we are proud that market share is increasing and this is a sign for our very good position in the industry and our leading position in operations efficiency. Austria, so we have as a second speaker we have also Eric Hash, he's CFO of Hornbach Balmark AG and he's also supporting the questions regarding the specificities of Hornbach. Please go ahead.

I didn't understand right, pre-opening cost of which special? Of the new of the Juxbox store that must have been included in your Q1 results.

Okay. Yeah. Here I must say that we do not disclose single store numbers. So we cannot tell you especially pre-opening cost of a certain market, a certain store which in this case should be Juxbox. And I don't have this number here. Sorry about that. And CapEx full year. Yes, so we have for the CapEx we are giving the indication that we will see ourselves above the level of 24/25 which has been around 148 million.